Last weekend, Ford's all-electric Mustang Cobra Jet 1400 set a new world record. Maybe it's the NASCAR nerd in me, but this is absolutely insane. The vehicle went a quarter mile in 8.128 seconds at 171.97 miles per hour, destroying last September's record of 8.27 seconds.
What does this lightning-fast record mean to the trading world? Well, it's all just another part of the ever-growing electric vehicle (EV) industry, projected to be worth a mind-boggling $802 billion by 2027.
Now, if you've been following along with me over at my free Profit Takeover newsletter, then you know how I feel about Ford Motor Co. (NYSE: F). It's been a stock near the top of my watchlist for a while now...
And it's also a company ready to take first place in the EV race - especially if it's driving that Cobra Jet I just mentioned.
But it's got some stiff competition. Tesla, Honda, Lordstown Motors, GM - the EV industry is quickly resembling the streaming wars (if you recall, that's when Amazon Prime, Disney+, and Hulu - to name a few of the big players - battled it out against Netflix over who would replace the streaming platform king) as more and more companies pile in.
Not all of these stocks, however, are worth your money. Today I'm bringing you the best - and worst - stocks in the EV industry to make sure you're getting the most bang for your buck in this explosive sector...
EV Stock Breakdown: Winners vs. Losers
1. Tesla Inc. (NASDAQ: TSLA)
Let's start with the "OG" of EV companies...
When most people think EV, they think TSLA. And I can't blame 'em - "Tesla" is a name synonymous with the EV sector, having completely ruled the market since being founded way back in 2003. Indeed, Tesla's enjoyed and reaped the benefits of having first-mover advantage in the current $170 billion global EV market for a while now.
Earlier, I compared the EV industry to streaming. And there's no doubt that TSLA is the Netflix of streaming. It was here first. Its stock has been on one of the steepest roller coaster rides the market has ever seen. A year ago today, TSLA was a $200 stock. Today, it's just over $680.
Sure, you can argue that its eccentric CEO, Elon Musk, might not be everyone's favorite guy or that he's "out there," but he's also everywhere. What's more, he holds a particular sway over the financial markets as well as social media.
But I've got a hot take here... Even with all that "muscle" - namely the fact that it's a well-established company that's been profitable for more than a year now and with a massive market cap of nearly $600 billion - TSLA isn't all it's cracked up to be.
At some point, it's going to run out of steam. Just like Netflix, it can't be king forever, and its explosive growth is behind it for the time being. And now with Ford calling out TSLA for a drag race, as you'll see in a few minutes, the time to buy into TSLA has already passed.
2. Lordstown Motors Corp. (NASDAQ: RIDE)
Similar to TSLA, RIDE is a company with a focus exclusively on EV. It went public in October and has plans to build electric trucks at a former General Motors plant located in Ohio. But it hasn't been working out for RIDE quite so well.
The two-year-old startup has yet to begin production on its first model, a battery-powered pickup called the Endurance that's set to target commercial buyers, such as businesses and fleet operators.
And just a few weeks ago, RIDE revealed it was running out of money. To make matters worse, its CEO resigned in mid-June, and then just last week, it was reported that five top executives of the firm, including its president and former CFO, sold more than $8 million in stock over a period of three days in early February, according to filings. If those aren't big, flashing warning signs that a company's headed for trouble, I don't know what is.
According to The Wall Street Journal, securities lawyers and accountants say such trades raise questions about the company's internal controls, especially in light of its more recent troubles. RIDE reported year-end results for the first time as a listed company in mid-March. Its net loss of $0.23 a share for the quarter was more than double analysts' expectations, according to FactSet.
The stock may be up 25% from its June low, but it doesn't change the fact that the company's running out of money, and then some. Simply put, this is one name I'd stay far, far away from.
Now, let's get to the good part of the list - the "buy" part...
3. Honda Motor Co. Ltd. (NYSE: HMC)
On Wednesday, HMC announced its first foray into the EV space with the reveal of the Honda Prologue, an electric SUV set to hit the market in early 2024, marking the start of the company's switch to zero-emission vehicles by 2040.
While Honda will be revealing more specific details about its brand-new vehicle over the coming months, it was shared that the Prologue SUV will be equipped with cutting-edge technology and high functionality. In addition to the Honda Prologue, the company will also unveil an all-electric Acura SUV in 2024.
In addition to all this, Honda's committed to its goal of providing completely carbon-free transportation in the upcoming years and is boosting the company's electrification efforts to reach that goal.
So it's really no wonder why I've liked HMC stock for a while now. It's up more than 27% over the past year - and this bold entry into the EV space just cemented its spot in the future of automaking.
4. General Motors Co. (NYSE: GM)
GM has been in the EV race for a while now, and I'm seeing a lot that I'm liking here.
For starters, as part of its strategic partnership with Honda, GM actually developed the battery system that'll be used in the Honda Prologue, making Honda's news good - read: profitable - for both companies.
And just this past Tuesday, GM announced that it'll double first-year production of its BrightDrop unit's EV600 electric delivery van to "keep pace with anticipated demand," which is on track to begin by the end of 2021. Initial orders will be going out to FedEx, as it'll play a huge role in helping FedEx reach carbon neutrality by 2040.
In short, all signs point to "buy."
5. Ford Motor Co. (NYSE: F)
Some of you know how I feel about Ford and its electric pickup truck, the F150 Lightning. This is a company that's ready to take tons of business away from TSLA - and as it does, there's a lot more room for upside in the stock.
In fact, just a day before Ford officially debuted the F-150 Lightning back in May, President Joe Biden visited a Ford plant in Michigan to tout his $174 billion electric-vehicle plan and take Ford's electric truck for a test drive.
Shares of the stock surged 13% for the week, signaling that investors are bullish about the sales potential for the newest version of the popular pickup model, and I don't see that changing anytime soon.
Now, production of the new F-150 won't begin until 2022, and the new model is set to compete amid a growing marketplace lineup of electric pickups, but I'm more than confident that it'll hold its own against the other lineups - including Tesla's Cybertruck.
Plus, spending related to Ford's EV initiatives is projected to grow to more than $30 billion by 2025. Ford previously planned an investment of $22 billion on EV development, expecting nearly 40% of its global vehicle volume to be electric by 2030.
"This is our biggest opportunity for growth and value creation since Henry Ford started to scale the Model T, and we're grabbing it with both hands," CEO Jim Farley told investors on May 26.
Lastly, Ford's focus on EVs is translating to increased sales, which translates to profits for us. Electric car sales surged 184% to a record 10,364 in May, with Ford's F-150 PowerBoost and Escape hybrid models leading that growth with sales of 2,852 and 3,617, respectively.
What's more, the automaker's release of its June 3 totals revealed that reservations for the new fully electric F-150 hit 70,000. Ford stock jumped 7% on that very day, hitting its highest levels in over five years, as investors reacted to the EV sales data.
And with EV sales only continuing to rise, Ford will ride that positive trend wave toward growth and profits for years to come.
Bottom line, TSLA used to own the EV space. But now, more and more companies are piling in. Competition is steep - which is bad for TSLA, but good for traders like you and me.
I'd suggest buying any or all three of these EV names I just mentioned. They're not only great companies for all the reasons I just listed, but none of them have had their big run up yet - they still have plenty of room to run from here. Clearly, that excludes TSLA.
EV is an industry of the future - and the names I just told you about could be the key to your next asymmetrical - low-risk/high-reward - profit, which is what we're all about over at my free Profit Takeover service.
My friend and colleague, Andrew Keene, is all about that, too. He believes the market's absolute best profit potential is in trading stocks right now - trading the right stocks.
Every week, he publishes a "Watch List" of stocks he thinks could make for great possible trading opportunities, and every Thursday, he hosts his Project 303 members for a live online "Trading Room" session. You can find out how to get Andrew's Watch List, and weekly access to his Trading Room, right here.
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